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How Much Really Changes?

“Plus ça change, plus c’est la même chose” is usually translated to “the more things change, the more they stay the same.” This quote was written by Jean-Baptiste Alphonse Karr a French critic, journalist and novelist. Today, this quote can certainly be true and most likely will be able to be used for generations to come.

The final countdown is on to November 3 and I know many people are looking forward to putting the election behind us. As I read about the history of United States elections, it does seem as if many parts of politics have not changed. What has certainly changed, is how we as voters, get our information from different sources, as well as how quickly. Someone can say something and within seconds the entire world can know about it.

In my reading, I came across the cartoon below which was published two weeks before the 1948 election which was projecting a large win by Thomas Dewey versus Harry Truman.

Clifford Kennedy Berryman, Artist/National Archives, Records of the U.S. Senate, 1789 – 2015

While not using the above cartoon to say anything of the current presidential election, it just shows, even seventy plus years ago, they were guessing what the polling was showing.

Looking forward to the next few weeks, the chart below shows how volatility within the equity markets, as measured by the S&P 500, increases in the days leading up to the election.

Sources: Bloomberg, Wells Fargo Investment Institute. Average of past presidential election years since 1988, except when recession overlaps with election (i.e. 2008). S&P 500 price is rebased to 100% on the Election Day. Date axis shows the days before and after Election Day. S&P 500 Index is a market capitalization-weighted index composed of 500 widely held common stocks that is generally considered representative of the U.S. stock market. The CBOE Volatility Index (VIX) is a real-time market index that represents the market’s expectation of 30-day forward-looking volatility. Derived from the price inputs of the S&P 500 Index options, it provides a measure of market risk and investors’ sentiments. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results.

Knowing volatility may increase, what does this mean for you? It means you need to take the emotion of the election out of the view of your long-term goals and not try to time the market around the movements of the election. Historically, an election has not significantly changed the direction of the market. The chart from above also shows volatility and returns following the election. Volatility has decreased and the returns have historically been positive post election. While no one knows what will happen after the election, we can go back to the quote from the beginning, “Plus ça change, plus c’est la même chose”.

I look forward to many of you attending the event “Election 2020: The Economy, Markets and You”, scheduled for October 29 at 5:30 PM (MST). If you still need to RSVP, click here with your name and any questions you would like answered during the call.

Have a wonderful weekend and I look forward to talking with you soon.


Chris Zeches, CFP®
Managing Partner